Membership Calculator - where?

[SageSound]

A while back someone here posted a link to a web page that had the ability to enter some basic numbers and it would forecast out your monthly and annual revenues from a membership site. I swear I saved the link somewhere, but I can't find it anywhere.

Does anybody have that URL, if it's still up?

(I'm not talking an Excel spreadsheet here. Rather, this was an interactive grid where you'd input some basic numbers and click a button, and it would re-calc right there on the page.)

Thanks
-David

[SageSound]

Doesn't this ring a bell for anybody?

[Chris Pambos]

Why not use the trusty old calculator? You can achieve the same end result of forecasting your own monthly recurring income as long as you know what your calculations are.

[SageSound]

Originally Posted by Chris Pambos

Why not use the trusty old calculator? You can achieve the same end result of forecasting your own monthly recurring income as long as you know what your calculations are.

sure, come on over here to my house so I can show you the numbers....

But ... don't you think it would be cheaper and more convenient if I could point you to a web site?

[Okane]

I don't know that website, but my guess is that the calculator is part of a pitch page to sell some kind of membership-site software / e-book / product.

If so, they most likely predict exponentional or linear growth to show you how unbelievably rich you will get with the membership business model.

That's completely unrealistic.

The truth is different... and a lot simpler.

So, here is the formula for calculating what you will make monthly with a membership site...

All you need are three numbers:
C = percentage of customers that cancel their membership per month
N = absolute number of new members you can generate per month
P = monthly price for the membership

Then, the upper limit for what you will make is:

maximum monthly income = (100% / C) * N * P

That's the point where the number of people leaving your membership site equals the number of people entering your membership site.

You can easily measure C.
You should be realistic with your estimate for N.

For example, lets say you have a $20 per month membership site, 20% of the members cancel their membership per month (in other words, an average customer stays for 5 months) and you generate one new member per day (30 per month).

--> 100% / 20% * 30 * $20 = $3.000

Your income will grow quickly in the beginning and than slowly approach that limit.

Growth above that limit is impossible, unless you improve one of the three numbers involved:
Lower the cancellation rate, i.e. by improving the quality of your content.
Generate more new members per day.
Increase the price.


Marc

[SageSound]

Thanks for the mathematical analysis. I'm sure it'll be very helpful when you come by here and let me show you how the numbers work out on my handy-dandy calculator.

(psst: I was a math major in college, and I write software for a living. What I'm looking for is a web site URL that someone posted here a while back that had a "live" grid on it that let you play 'what-if' scenarios with these numbers. Sorry if that wasn't very clear. A web site URL. Not an Excel spreadsheet, or page of formulas; I've got them. A web site URL. http://____________ )

-David

PS: did I mention I'm looking for a web site URL? One that already exists.

[Okane]

Hmm.. for someone confident in maths and programming, I'd say it's a task of 10 minutes to make such a calculator on your own...

Anyway... did you try googling for...
membership calculator site:warriorforum.com

This way, I found the following thread that includes a link to a membership calculator in post #7...
Stumbling block: pricing


Maybe that's the one you've been looking for?
They even use the correct maths inside...

Marc

[Learnanew]

There's also the one at Mark Monciardini's Cover Action Pro 2.0 blog:

Membership Calculator Revised | Cover Action Pro? BLOG

I believe you need excel to use it though.

[lakshaybehl]

Marc,

Do not forget the power of compounding numbers here.

If one chooses to re-invest 50% of their income into new lead generation mechanisms, they can seriously kill it.

So while your numbers may be right for someone that's not re-investing, someone that's reinvesting can definitely go exponential.

-Lakshay

Originally Posted by Okane

I don't know that website, but my guess is that the calculator is part of a pitch page to sell some kind of membership-site software / e-book / product.

If so, they most likely predict exponentional or linear growth to show you how unbelievably rich you will get with the membership business model.

That's completely unrealistic.

The truth is different... and a lot simpler.

So, here is the formula for calculating what you will make monthly with a membership site...

All you need are three numbers:
C = percentage of customers that cancel their membership per month
N = absolute number of new members you can generate per month
P = monthly price for the membership

Then, the upper limit for what you will make is:

maximum monthly income = (100% / C) * N * P

That's the point where the number of people leaving your membership site equals the number of people entering your membership site.

You can easily measure C.
You should be realistic with your estimate for N.

For example, lets say you have a $20 per month membership site, 20% of the members cancel their membership per month (in other words, an average customer stays for 5 months) and you generate one new member per day (30 per month).

--> 100% / 20% * 30 * $20 = $3.000

Your income will grow quickly in the beginning and than slowly approach that limit.

Growth above that limit is impossible, unless you improve one of the three numbers involved:
Lower the cancellation rate, i.e. by improving the quality of your content.
Generate more new members per day.
Increase the price.


Marc